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World News

Macron’s Government Resigns in the First Step of a Reshuffle

Emmanuel Macron asked his prime minister, Edouard Philippe, and his government to resign as the French president follows through on a pledge to reinvent his government and move past a disastrous election last month.

Macron accepted the resignation on Friday, his office said in an emailed statement. The prime minister and his government will continue handling affairs until a new administration is formed, a process that could take days.

Macron, 42, is seeking a new lease on his presidency, contending with a Yellow Vest movement that has rallied against his efforts to overhaul the pension system as well as a pandemic that has caused nearly 30,000 French deaths. His Republic on the Move party was broadly rejected in a June 28 municipal ballot that saw the Green Party gain strongholds throughout the country.

The French leader has been walking a fine line between promises to overhaul his policies while also standing by commitments to make the nation more friendly to international investors. So far, he’s pledged that his government would invest an extra 15 billion euros ($16.9 billion) over the next two years to facilitate the economy’s environmental transition.

The reshuffle is the first step ahead of the appointment of a new government, which can intervene days later, according to France’s Constitution. Philippe could be reappointed as prime minister.

Philippe, whose popularity has risen during the coronavirus crisis, has been eyed as a possible contender in the next presidential election in 2022. In an Elabe poll published this month, 57% of respondents said Philippe should remain in his post as prime minister.

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World News

Sweden Launches Commission to Investigate Coronavirus Response

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Sweden’s government has initiated a commission to investigate its controversial approach to the Covid-19 pandemic.

Sweden has taken a different path compared to most European countries by keeping much of society open and by recommending social distancing and self-isolation rather than imposing a blanket lockdown. That strategy has resulted in a much higher death rate than in neighboring countries, according to Johns Hopkins University data.

The commission will evaluate the steps taken by the government and local authorities to limit the spread of the coronavirus, comparing them with what was done elsewhere.

44,766 in U.S.Most new cases today

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-2.​3% Global GDP Tracker (annualized), May


The commission is due to deliver its final report in February 2022. Two preliminary reports will be submitted prior to that. The first, due on November 30, will look into the spread of the virus in health care centers and retirement homes. As of June 24, 3,612 people aged 70 or more living in care homes or receiving home care had died from Covid-19, according to data from the National Board of Health and Welfare. That represents 79% of the total deaths recorded up to that date.

Sweden’s top epidemiologist, Anders Tegnell, has defended the country’s strategy, arguing that keeping much of society open while training people to observe distancing guidelines is the only realistic way to cope with the pandemic in the long run. Tegnell’s main concern is that strict lock-downs may temporarily contain the virus, but won’t prevent it from returning. He also says lockdowns come at an avoidable cost.

Still, Sweden’s relatively high infection rates mean its citizens are prevented from traveling to most countries.

The government’s handling of the pandemic has come under severe criticisms from the opposition, which has pushed for the commission to report back ahead of the next general election, due in September 2022.

The government on Tuesday appointed Mats Melin, a former president of Sweden’s Supreme Administrative Court, as head of the commission.

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Markets

China Factory Outlook Brighter in June as Recovery Continues

A gauge of China’s manufacturing activity climbed in June, signaling the country’s gradual recovery from the coronavirus slump remains on track.

The official manufacturing purchasing managers’ index rose to 50.9 from 50.6 a month earlier, according to data released by the National Bureau of Statistics on Tuesday. The non-manufacturing gauge rose to 54.4. Readings above 50 indicate improving conditions from the previous month.

The data confirm the trend of a gradual domestic recovery from the historic contraction in the first quarter and back up the government’s relatively modest stance on policy stimulus. But with the coronavirus hitting global demand and continued outbreaks of the virus not ruled out the rebound may prove hard to sustain.

A sub-index of new export orders climbed to 42.6, while manufacturing employment fell to 49.1 and the non-factory job index rose to 48.7.

The data show that manufacturing is still leading the recovery in China, said Zhou Hao, senior emerging markets economist at Commerzbank AG in Singapore. “China’s GDP growth is very likely to turn positive in the second quarter. However, the job data remain a concern as both job indices are below 50, suggesting that the demand recovery still lags behind.”

While parts of the economy have recovered from the virus shutdowns, there’s an apparent divergence between demand and supply — factories and companies have returned and output is growing again, but exports are domestic retail sales are shrinking.

Inventory Pressure

Almost 55% of firms said demand was inadequate, the fourth straight month more than half of firms have said that, Wen Tao, an analyst at the China Logistics Information Center, which helps compile the data, wrote in a report on its website.

“The new orders index is lower than the output index by 2.5 percentage points, meaning the gap between production and demand is widening, leading to rising oversupply pressures.”

Tourism revenue fell almost 70% during a three-day holiday last week compared to the same period in 2019, according to China International Capital Corp. Severe flooding in southern China may also have slowed the pace of production in some areas, and a recent flare-up of the coronavirus has also hit confidence.

A separate PMI indicator that gauges China’s high-tech industries slowed significantly this month. A Bloomberg Economics gauge of early indicators on the economy picked up in June, with a better performance for smaller companies tempered by the still-grim global outlook.

Small Firms

However, the position of small firms has begun contracting again, according to today’s data, while medium-sized firms rose above 50 and larger companies improved further. More small firms reported a lack of orders compared to larger companies, according to the NBS statement.

“China’s recovery is still on track, but the momentum could lose some steam in coming months,” said Lu Ting, chief China economist at Nomura International Ltd in Hong Kong. “Despite the strong recovery between March and mid-June, we believe a full economic recovery remains distant. In our view, it is too early for Beijing to reverse its easing stance.”

— With assistance by Sharon Chen, Yinan Zhao, and Miao Han

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World News

Germany’s Virus Infection Rate Edges Up as Number of Death Slows

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Germany’s coronavirus infection rate rose after five consecutive days of declines, while the country reported the smallest increase in the number of new deaths from the pandemic since Monday.

  • The reproduction factor — or R value — rose to 0.62 on Saturday from 0.57 the previous day, according to the latest estimate by the country’s health body, the Robert Koch Institute.
  • The estimate means that out of 100 people who get infected, a further 62 are likely to contract the virus. The government is trying to keep the value below 1.0 to prevent exponential growth in infections.
  • There were 422 new cases in the 24 hours through Sunday morning, down from 665 the previous day and bringing the total to 194,458, according to data from Johns Hopkins University. That compares with almost 7,000 at the peak of the pandemic in late March.
  • Fatalities increased by three to 8,968.
  • The infection rate was as high as 2.88 on Monday with local outbreaks in the western state of North Rhine-Westphalia “playing a particularly important role,” according to RKI.
  • “The dynamics of the various outbreak events are also influenced in part by serial tests carried out in the scope of the detected outbreaks, which can promptly lead to the detection of further infected persons,” RKI said. “For this reason, the reproduction figures may continue to fluctuate strongly.”
  • The RKI also provides a seven-day R value, which compensates for fluctuations. That value was 0.83 on Saturday, down from 1.02 the previous day.

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Business

Australian Virus Hot Spot Victoria Reports Spike in New Cases

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The Australian state of Victoria reported another spike in new coronavirus infections Saturday, raising concerns that the outbreak may be getting out of control.

The Victoria state government said 41 new cases had been detected, the biggest daily increase since early April, and 15 involved community transmission. It’s the eleventh consecutive day of double-digit numbers of infections in the state, home to the city of Melbourne.

“We’re very concerned,” Victoria Deputy Chief Health Officer Annaliese van Diemen told a news conference. “That is why we have ramped up these efforts to really, really find every possible case that we can.”

46,860 in BrazilMost new cases today

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Australia has been one of the stand-out performers globally in limiting the spread of the virus and has begun to ease restrictions, but the flare-up in Victoria could force a rethink and potentially delay the reopening of some state borders. Plans to open a travel “bubble” with neighboring New Zealand have already taken a knock as both countries grapple with incidents around virus management.

The Victorian government has increased testing and tracing and tightened some rules, reducing the number of visitors people can have in their homes to five and limiting outside gatherings to 10.

“These moves are important to keep our community safe and to ensure Covid-19 does not get away from us,” Victoria Chief Health Officer Professor Brett Sutton said in a statement. “We do not want Victoria to suffer like many major cities around the world who have been devastated by the severe impacts of Covid-19.”

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World News

Martin to Take Over as Irish Prime Minister in Grand Coalition

Micheal Martin is set to take over as Ireland’s new prime minister Saturday at the helm of the nation’s first grand coalition, replacing Leo Varadkar in what will be a rotating premiership.

The Irish parliament will elect Martin, 59, as prime minister in Dublin, four months after a general election failed to produce a clear winner, after the Green Party voted on Friday to enter government with the nation’s traditional powerhouses, Fianna Fail and Fine Gael.

Lawmakers will meet in a convention center in the city’s docklands instead of its usual home in the city center to allow social distancing.

Martin will lead the country until December 2022 when Varadkar is due to replace him in an accord agreed by Martin’s Fianna Fail party and Varadkar’s Fine Gael. The move to enter government together effectively ends a political divide that originates from Ireland’s civil war almost a century ago. The groups that became Fine Gael and Fianna Fail fought on opposite sides in that conflict, and the split has been the main divide in Irish politics since.

They came together after February’s election amid a surge in support for rival party Sinn Fein. Both Fianna Fail and Fine Gael refused to work with Sinn Fein because of its former links to terrorism and left-wing politics.

Economic Warning

The new government will have to grapple with the fallout from the coronavirus crisis. While case numbers have plummeted, the economy is expected to shrink by about 8% this year, according to the Irish central bank. Even without the pandemic, the government will be under pressure to move quickly to ease a housing shortage and homelessness crisis that emerged as key issues during the election campaign.

The country could run a 30 billion-euro deficit this year to pay for coronavirus related costs. Moreover, Brexit is still to be resolved, with Ireland the economy most at risk should the U.K. exit the bloc without a trade deal.

Martin’s election caps a 30 year career as a lawmaker. He took over leadership of Fianna Fail in 2011 after the party’s support collapsed in the wake of the financial crisis. While the party has revived since, it has struggled to regain its foothold at the top of the political system. It won 22% at February’s election, barely half the party’s share in 2007.

His predecessor, Varadkar, leaves office with his personal approval rating at a record high of 75% due to his handling of the crisis, according to an Irish Times poll.

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Business

Germany’s Virus Infection Rate Drops to Lowest in Three Weeks

Germany’s coronavirus infection rate fell to the lowest in three weeks, while the number of new cases remained well below the level at the height of the outbreak.

  • The reproduction factor — or R value — dropped to 0.59 on Thursday from 0.72 the previous day, according to the latest estimate by the country’s health body, the Robert Koch Institute.
  • The estimate means that out of 100 people who get infected, a further 59 people are likely to contract the virus. The government is trying to keep the value below 1.0 to prevent exponential growth in infections.
  • There were 500 new cases in the 24 hours through Friday morning, up from 391 the previous day and bringing the total to 193,371, according to data from Johns Hopkins University. That compares with almost 7,000 at the peak of the pandemic in late March. Fatalities increased by 12 to 8,940.
  • During the past week, the infection rate had been lifted as high as 2.88, driven up by local outbreaks, including in two municipalities in the western state of North Rhine-Westphalia. In the district of Guetersloh, more than 2,000 people were infected, most of them working at a local meat plant.
  • “The dynamics of the various outbreak events are also influenced in part by serial tests carried out in the scope of the detected outbreaks, which can promptly lead to the detection of further infected persons,” according to the RKI. “For this reason, the reproduction figures may continue to fluctuate strongly.”
  • The RKI also provides a seven-day R value, which compensates for fluctuations. That value was 1.11 on Thursday, down from 1.17 the previous day.

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World News

U.S. Airlines Vow Refunds for People Turned Away for Fever

The trade group representing large U.S. airlines said its members would refund the tickets for any passenger denied boarding after being screened by the government for an elevated temperature.

Airlines for America has been calling on the Transportation Security Administration to conduct temperature screenings of all airline passengers as a way to help protect travelers from Covid-19.

The TSA said in a statement on Thursday evening that it hadn’t made any decisions about whether to conduct such checks.

“Temperature checks are one of several public health measures recommended by the CDC amid the Covid-19 pandemic and will add an extra layer of protection for passengers as well as airline and airport employees,” the trade group said in a press release earlier Thursday, referring to the Centers for Disease Control and Prevention.

Such screenings will also provide additional confidence that it is safe to travel, the group said.

The group didn’t say why it made such a promise when there is no widespread temperature screening in place for passengers now. A handful of airlines and airports are taking travelers’ temperatures on a trial basis.

Airline travel in the U.S. fell by more than 95% in mid-April as the government urged people to stay at home during the pandemic. It has rebounded somewhat, but remained 79% below 2019 levels in the past week, according to TSA data.

Airlines have taken multiple steps to reduce the risks of infection and improve customer confidence in recent months. On June 15, A4A members said they would take actions including barring people from flying if they refused to follow face-covering guidelines.

The federal government has declined to require any health-related actions related to airline passengers during the pandemic, relying instead on voluntary measures.

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World News

Gove Attacked Over ‘Veil of Secrecy’ in Key Brexit Discussions

The U.K. government is hindering lawmakers’ efforts to properly scrutinize key decisions over the country’s exit from the European Union, a parliamentary panel said.

The European Scrutiny Committee called on Cabinet Office Minister Michael Gove to lift what it called the “veil of secrecy” surrounding the Joint EU-U.K. Committee and its sub-committees that oversee the implementation of the Brexit Withdrawal Agreement. The panel also asked Gove to promise to consult Parliament on any changes affecting Northern Ireland.

The call came after the EU submitted a set of proposals, including one that would expand the list of its laws that would remain applicable in Northern Ireland after Britain’s final parting with the bloc in December. While the U.K. rejected most of them, members of parliament criticized the government for not making its intention to do so clear.

“The government’s current approach in informing Parliament about its participation in the Joint Committee responsible for overseeing the implementation of the Withdrawal Agreement needs significant improvement,” Committee Chairman William Cash, a Conservative, said in a statement on Wednesday. The “government must be more open about the role of the Joint Committee and ensure effective parliamentary scrutiny of the decisions it takes.”

The border between Ireland and Northern Ireland was one of the most controversial aspects of the divorce talks between the U.K. and the European Union. After years of negotiations, Prime Minister Boris Johnson effectively agreed to keep the region in the EU’s customs union and large parts of its single market — a move opposed by unionist parties, who argued the decision would create barriers to trade between Great Britain and Northern Ireland and risk splitting the U.K.

The Cabinet Office didn’t immediately respond to a request for comment.

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Kenyan MPs Approve New Taxes to Boost Revenue During Pandemic

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Kenya’s National Assembly approved a raft of tax measures, including a charge on all companies as the government seeks to boost revenue and navigates the coronavirus fallout.

Lawmakers approved the Finance Bill 2020 which includes a minimum tax of 1% on gross turnover. The measure could raise about 21 billion shillings ($197 million) yearly, said finance committee Chairman Joseph Limo. It will also ensure companies that perennially report losses also contribute to government programs, according to the committee.

Kenya is looking to raise money to fund its 2.8 trillion-shilling budget for the next fiscal year, and help boost an economy battered the virus. The government wants to narrow its budget gap to 7.5% of gross domestic product in the year starting July.

The lawmakers also approved a 1.5% digital levy targeted at non-resident companies that derive income from Kenya including taxi-hailing platforms and streaming sites. That could raise about 2 billion shillings, according to the National Assembly.

The legislature will submit the bill to President Uhuru Kenyatta to sign into law before the new fiscal year begins on July 1.

The lawmakers also approved:

  • Zero-rating value-added tax on wheat and maize flour
  • Removal of excise duty on betting
  • Rental income tax of 10% on gross income; capped annual rental income to be taxed at 15 million shillings from 10 million shillings
  • Capital Markets Authority to regulate private equity- and venture-capital firms that have access to public funds including pensions
Read more:

How Three East Africa Nations Will Free Up Cash for Stimulus

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